India and China Play Down Border Tensions

By

Will Davies

Updated May 20, 2013 12:46 p.m. ET

NEW DELHI—Indian Prime Minister Manmohan Singh and his Chinese counterpart, Premier Li Keqiang, played down a recent border dispute, as they stressed the need for cooperation between the world's two most populous countries.

A standoff between Indian and Chinese troops in the Himalayas ended in early May but threatened to overshadow Mr. Li's visit to India, the opening leg of his first trip abroad since taking office in March.

As soon as Chinese Premier Li Keqiang visited India for his first official visit, attention turned to a territorial dispute. The WSJ's Joanna Sugden talks about why the dispute could get in the away of ambitious bilateral trade targets.

Mr. Li arrived in Delhi on Sunday. Both leaders, who appeared at a joint news conference on Monday, looked eager to defuse any lingering tension by focusing instead on common interests, including their increasing significance to the global economy.

"India and China have a historic opportunity for economic and social development and the realization of this goal will advance peace and prosperity in Asia and the world at large," the two sides said in a statement.

The leaders discussed ways to address the bilateral trade imbalance: India's deficit widened 42% last year to nearly $40 billion.

Areas of potential greater cooperation include improving ties between Chinese enterprises and the Indian information-technology industry, the statement said. The two countries are aiming for trade volume of $100 billion by 2015, up from $70 billion last year.

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Many economists say India will achieve trade parity with China only when it develops a more mature manufacturing base.

"I conveyed to Premier Li our concerns about the trade deficit and sought increased market access to China for our exports and investments. I also invited increased Chinese involvement in the vast opportunities in our infrastructure and manufacturing sectors," Mr. Singh said in a speech on Monday.

The two sides signed eight bilateral agreements, including one on trade in buffalo meat, which an industry expert said could help redress the trade imbalance as Chinese demand for the meat is potentially valued at $1.5 billion a year. India is the world's leading exporter of buffalo meat, shipping more than $3.2 billion annually.

Other agreements included sewage treatment, water management, book translation and the twinning of cities—or identifying sister cities, states or provinces, India's Ministry of External Affairs said.

The joint statement added that discussions covered areas such as expanding civil nuclear-energy programs, enhancing cooperation on maritime security, holding joint military exercises and simplifying visa procedures. Both sides reiterated their support for an "Afghan-led, Afghan-owned" reconciliation process, the statement said.

In an editorial in Indian newspaper the Hindu, Mr. Li said China and India need to "work hand in hand" to promote Asia as an "anchor for world peace."

"Asia's future hinges on China and India. If China and India live in harmony and prosper together, and if our two markets converge, it will be a true blessing for Asia and the world at large," he wrote.

Both sides remain wary of one another, however.

In India, there remains a sense of distrust. A survey by the Lowy Institute of International Policy, an Australian think tank, said more than four-fifths of Indians view China as a security threat. "The poll reveals multiple reasons for this mistrust, including China's possession of nuclear weapons, competition for resources in third countries, China's efforts to strengthen its relations with other countries in the Indian Ocean region, and the China-India border dispute," the study said.

Many Tibetans, who are hoping for greater autonomy in China, are also uneasy over the relationship between India and China. The Tibetan government in exile is based in the northern Indian town of Dharamsala, which is also the home of the Tibetan spiritual leader, the Dalai Lama.

Tibetan groups said police told them not to protest Monday at Jantar Mantar, a popular ground for demonstrations in the capital. A spokesman for Delhi police declined to comment on operations to contain protests. Last year, a Tibetan protester set himself on fire in New Delhi ahead of a visit by then-Chinese President Hu Jintao for a summit. The protester died from his injuries.

There was an increased police presence Monday in Delhi. Metro stations and roads in the center of the capital were closed for much of the day as Mr. Li was given a reception at the presidential palace and visited Mahatma Gandhi's memorial.

Monday afternoon, the Chinese premier met with Sonia Gandhi, president of the ruling Congress party. On Tuesday, Mr. Li will address a meeting hosted by the Federation of Indian Chambers of Commerce and Industry and Indian Council of World Affairs before flying to India's financial capital, Mumbai.

Mr. Li will depart for Pakistan on Wednesday morning, and later will visit Germany and Switzerland.

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